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    How to File a Mechanic’s Lien

    You are not alone if you have never heard of a Mechanic’s Lien or if you have heard the word but are still determining its meaning.

    Take the time to properly understand the mechanic’s lien laws in your State or any other State you do business in, when you are a general contractor, sub-contractor, building material suppliers, a professional in the construction industry or even a labor provider.   By being aware of the mechanic’s lien laws in the State where you do with  you can ensure that following procedure, protects your income.

    What Is a Mechanic’s Lien?

    A mechanic’s lien is a formal claim against real estate that aids in securing payment. A Mechanic’s Lien is a lien filed on the Owner’s property by the general contractor, sub-contractor, building material suppliers, a professional in the construction industry and labor provider for monies owed to them.  It imposes a claim on a property until full payment is received. The claim is a lien on the property, and it only gets distinguished when the claim is paid off via a property refinance, sale or by perfecting it in court by filing a law suit against the property owner, or simply paying it off directly to the party who filed the claim/lien.

    How Does a Construction Mechanic’s Lien Work?

    Every State has construction lien laws, which allow contractors and suppliers to place a lien on the property where work was performed if they aren’t paid. Due to the lien’s attachment to the property title and owner-created hassles, it is the last option but a very effective instrument for helping construction businesses get paid.

    The process of submitting a lien is not overly complicated at first glance. It only takes a few minutes to fill out a construction Mechanic’s lLen form, especially with the i-Lien software, that simplifies the process, and submit it to the recording office of the jurisdiction where the property is located. Depending on the State, the party filing the claim has sixty days to two years (on average) to negotiate payment with the property owner after filing a claim.

    However, rather than seeing a Mechanics Lien as a single document, it’s wiser to view it as a process. It is because, in most situations, a contractor must issue specific notices at the start or throughout a project to safeguard their right to file a lien eventually if they don’t get paid. You can find that you don’t genuinely have lien rights when you need them, if you skip a step or miss a deadline.

    Even the most minor errors in the Mechanic’s Lien process may invalidate your payment claim. The devil is in the details, and American Mechanics Lien rules demand unprecedented specificity. Additionally, the regulations vary based on the real estate’s location and the project’s type.

    Despite the challenges, a Mechanics Lien is the most powerful payment guarantee for construction companies. It may be more effective than taking legal action to execute a construction contract (which ultimately depends on a judgment lien). Contrarily, a construction lien frequently enables a contractor to receive payment without needing to retain legal counsel or appear in court.

    The Steps for Filing a Mechanic’s Lien

    You must first be aware of the urgency to submit a mechanic’s lien. You risk having your request rejected if you wait too long to file and only do so when a mechanics lien is required. You must provide clear notices in advance, usually at the start of the project, to maintain your right to file your lien. These notices are generally known as “Preliminary Notices to Owner” and “Notices of Intent to Lien (NOI).”  The following are three main steps before even filing a mechanic’s lien:

    1.     Sending Preliminary Notices to Owners

    The procedure for filing a lien shouldbegin with sending a preliminary notification with proof of mailing or via Certified Mail where required. It is the Preliminary Notice to Owner that establishes the Lien Rights to get paid. Preliminary notifications, also known as “Pre-Lien Notices to Owner” or “Preliminary Notices to the Owner,” are written communications given by the construction party to the project ‘s property owner to let them know who is involved in the project. In order to prove that the Notice was sent, you must “Proof of Service, such as US Post Office Certified Mail with return receipt or a stamp on the PS3877 form

    Besides having the legal requirement in most States to provide a Preliminary Notice to Owner even on small jobs, consider these notices a form of inexpensive insurance for your construction business. Even though everything might go without a hitch, this is only to ensure that you have established your Prelien Rights and you are prepared to protect your income and get paid, if there is an issue.

    2.     Sending NOI

    The next stage in the procedure is to submit an NOI, “Notice of Intent”, also known as a “Lien Warning Notice” or “Notice of Intent to Lien.” You will deliver this notice as a final reminder if you have been working on the propertybut have yet to receive payment. Doing this will offer the paying party one last opportunity to pay the cost before you place a Mechanic’s Lien on their property.

    Before filing a Mechanic’s Lien, some States may require claimants to send a Notice of Intent; nevertheless, even if this is not a requirement in some States, it is still advisable to provide a Notice of Intent. Delivering an NOI lets the parties  know that you’re genuinely concerned about it and gives them a chance to work out a payment solution.

    The parties making the payments will want to avoid having liens, so doing so will help everyone involved resolved the unpaid balance. The notice is always delivered following a Preliminary Notice to Owner and before the filing of a lien. States that require NOIs have different deadlines. Inform yourself with those different requirements for the States you do business in.

    3.     File a Mechanic’s Lien

    Construction businesses may formally file a  Mechanic’s Lien form sign and notirized with the county where the property they performed work is located,if payment is not made by the conclusion of the 20–30-day notice period.

    Mechanic’s Liens are the best strategy for recovering payments for unpaid suppliers and contractors. The job site becomes collateral for a contractor’s debt when a mechanics lien is filed. It encourages the party with a lien to make restitution and put the dispute to rest.

    State-specific deadlines vary, but generally speaking, a Mechanics Len needs to be filed within a certain amount of time from the final day that labor or supplies were provided. A Mechanics Lien must then be enforced within a certain time from the day it was filed and at that point a lawyer will have to be involved in order to perfect the lien.

    Use the i-Lien Software to Automatically Create Construction Mechanic’s Lien Forms

    Preparing your Mechanic’s Liens involves more than downloading a form, filling it out, and submitting it. Lien laws are complex, so you must take care and provide the necessary details in your construction Mechanic’s Lien forms. And you need to be attentive to use the proper form.

    The good news is that i-Lien Software makes the mechanic’s lien process a breeze. You no longer need to spend hours getting your construction mechanic’s lien forms right. The i-Lien software automates and streamlines the process of creating Construction Lien notices & Mechanic’s Lien documents to save time, safeguard your rights, and help you get paid quickly! Call us Today!

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